Debtors wanted
Many lawyers and trustees who had handled bankruptcy cases are feeling pinched after last year's law change
Sacramento Business Journal - May 19, 2006
by Kathy Robertson, Staff Writer
Bankruptcy filings in Greater Sacramento have plummeted 76 percent this year.
Chapter 7 liquidations are down 80 percent.
For those in the bankruptcy business, it's survival of the nimble. The numbers -- down precipitously following a huge rush to file before the federal bankruptcy reform law kicked in Oct. 17 -- are expected to climb back to normal levels by year-end. But questions remain: What to do in the meantime and what will the market look like if and when it resurges?
Some have thrown in the towel.
"Thirty percent of bankruptcy lawyers are gone," said Roman Rector, a lawyer who remains one of the biggest filers in the region. "Ten percent retired early. Ten percent now do other kinds of law, and 10 percent quit practice and went to government jobs or other firms."
Four out of 18 local bankruptcy trustees have taken a break, too.
These are the folks who shepherd the cases through bankruptcy court. They work on rotation, and are randomly assigned cases as they are filed. Some do it exclusively. Others have other business they do when they're not on rotation. Still others are retired lawyers or judges who put themselves in the line-up because they don't want to be bored.
"With a quarter of our normal caseload, four have chosen to go off rotation," said Antonia Darling, assistant U.S. Trustee in Sacramento.
Bankruptcy is the food chain for lawyers and trustees, but it's also big business for the people in debtor education, case management and credit counseling. The bankruptcy reform law is complicated and requires debtors to jump through a few more hoops to discharge their debts. A trial for some, the new steps mean business opportunity for others.
Are lawyers charging more since it's a lot more work for them with the new laws, or did they anticipate this lull in filings?
Many lawyers and trustees who had handled bankruptcy cases are feeling pinched after last year's law change
Sacramento Business Journal - May 19, 2006
by Kathy Robertson, Staff Writer
Bankruptcy filings in Greater Sacramento have plummeted 76 percent this year.
Chapter 7 liquidations are down 80 percent.
For those in the bankruptcy business, it's survival of the nimble. The numbers -- down precipitously following a huge rush to file before the federal bankruptcy reform law kicked in Oct. 17 -- are expected to climb back to normal levels by year-end. But questions remain: What to do in the meantime and what will the market look like if and when it resurges?
Some have thrown in the towel.
"Thirty percent of bankruptcy lawyers are gone," said Roman Rector, a lawyer who remains one of the biggest filers in the region. "Ten percent retired early. Ten percent now do other kinds of law, and 10 percent quit practice and went to government jobs or other firms."
Four out of 18 local bankruptcy trustees have taken a break, too.
These are the folks who shepherd the cases through bankruptcy court. They work on rotation, and are randomly assigned cases as they are filed. Some do it exclusively. Others have other business they do when they're not on rotation. Still others are retired lawyers or judges who put themselves in the line-up because they don't want to be bored.
"With a quarter of our normal caseload, four have chosen to go off rotation," said Antonia Darling, assistant U.S. Trustee in Sacramento.
Bankruptcy is the food chain for lawyers and trustees, but it's also big business for the people in debtor education, case management and credit counseling. The bankruptcy reform law is complicated and requires debtors to jump through a few more hoops to discharge their debts. A trial for some, the new steps mean business opportunity for others.
Are lawyers charging more since it's a lot more work for them with the new laws, or did they anticipate this lull in filings?
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